A federal court delivered a serious blow to the Environmental Protection Agency’s renewable fuel agenda, ruling that the agency exceeded its authority by mandating refiners use cellulosic biofuels, which isn’t commercially available.
The court sided with the country’s chief oil and gas lobby, the American Petroleum Institute, in striking down the 2012 EPA mandate that would have forced refineries to purchase more than $8 million in credits for 8.65 million of gallons of the cellulosic biofuel. However, none of the biofuel is commercially available.
“[W]e agree with API that EPA’s 2012 projection of cellulosic biofuel production was in excess of the agency’s statutory authority,” reads the court decision.
API said refiners were forced to purchase biofuel credits for nonexistent gallons of cellulosic biofuel to meet the EPA’s mandate, reports the Hill.
“We are glad the court has put a stop to EPA’s pattern of setting impossible mandates for a biofuel that does not even exist,” API Group Downstream Director Bob Greco said in a statement. “This absurd mandate acts as a stealth tax on gasoline with no environmental benefit that could have ultimately burdened consumers.”
The court added that the cellulosic biofuels program punished refiners for the failure of producers to make enough biofuel to meet the EPA’s mandate.
“Here, by contrast, EPA applies the pressure to one industry (the refiners), yet it is another (the producers of cellulosic biofuel) that enjoys the requisite expertise, plant, capital and ultimate opportunity for profit,” reads the decision. “Apart from their role as captive consumers, the refiners are in no position to ensure, or even contribute to, growth in the cellulosic biofuel industry.”
“‘Do a good job, cellulosic fuel producers. If you fail, we’ll fine your customers,’” the decision says.
The excessive blending requirements were meant to help develop cellulosic biofuels, and they have been aggressively defended by the biofuels industry. A source in the biofuels industry told the Hill that it’s too early to tell how industry investors will respond to the decision.
“[A]lthough we disagree with the court’s decision vacating the 2012 cellulosic volumes, today’s decision once again rejects broad-brushed attempts to effectively roll back the federal Renewable Fuel Standard,” reads a joint statement from biofuel groups.
However, the decision did not strike down EPA mandates for refiners to use other renewable fuels, like ethanol and biodiesel, into gasoline.
“This decision relieves refiners of complying with the unachievable 2012 mandate and forces EPA to adopt a more realistic approach for setting future cellulosic biofuel mandates,” said Greco. “The court has provided yet another confirmation that EPA’s renewable fuels program is unworkable and must be scrapped.”
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